The market for customer relationship management (CRM) continues to grow. IDC estimates that global annual spend on CRM is running at around $70 billion, and set to top $148 billion by 2005. Annual global spend on CRM software and hardware is roughly equivalent to the effort and energy that went into the Iraq war.
The question executives are asking themselves now is whether this spend is effective or not?
Gartner, in turn, advises that 42% of installed CRM software is unused, and there are significant difficulties among the remaining 58% in achieving return on investment.
Accordingly, many companies have put their CRM initiatives on hold, citing budgetary pressure as their prime reason.
Yet CRM, it has been said often enough, is much less about technology than it is about orienting the organisation around customer management actions - some quite logical, obviously low-tech and inexpensive.
Many of them also have the benefit of being time-honoured, and they cost next to nothing (other than time and effort!). Herewith, then, a list of low-tech, high-touch actions companies can undertake to lay the foundation for CRM:
The record shows that up to 80% of executives are not directly involved in customer engagement and management.
Doug Leather, CEO, Knowledge Factory
* First of all, involve the boardroom in the process. The record shows that up to 80% of executives are not directly involved in customer engagement and management; rather, they busy themselves with the setting and fulfilment of strategy (of course, in isolation of customers!). Therefore, they cannot be expected to understand, buy into or have key accountability for the customer management process and its overall outcomes.
* Appoint a chief customer officer. Most companies today have a chief executive officer, a chief information officer and a chief financial officer; all depend for their existence on the revenues that flow from customer engagement, acquisition, retention and growth. The sales director is incentivised on acquiring, retaining and growing customers; on identifying their existing and future needs, and aligning product and service development accordingly. The chief customer officer should either be represented on the board (ideal), or report directly to the CEO.
* Start anew, all the way back to basics. Consider the impression your customer has of you. Review their many touchpoints, and imagine their experience at each of these touchpoints. For instance, when you constructed your call centre, did you do so with service excellence or customer reduction in mind? Your answer will determine how customers experience your company. If you are interested in reducing the overall cost of interaction, your call centre will have as a key performance indicator a consistent brevity of call. This would imply a uniformity of experience for all customers, irrespective of their individual current and lifetime value. High-value customers, on the other hand, might be expecting superior service through this channel, but they will instead have a standard, vanilla experience, exactly the same as those of low lifetime value.
* Your policy may be, for instance, to provide a world-class experience through your call centre, but not to carry a customer service telephone number on your Web site so as to reduce the volume of unscheduled calls to the company. (Not an unusual practice. Have a look around and see how many well-known and popular Web sites you can find that lack comprehensive corporate details.) This represents an inward- rather than customer-facing mindset, and it ensures customers continue to have a fragmented experience.
* Improve the training of customer service representatives on existing systems. The benefits here are manifold: apart from improving customer service, the business will benefit in many ways from enhanced productivity, streamlined processes, staff retention and generally better business. Provide training, especially, in product knowledge and interpersonal skills, and look for and amend duplications, errors and redundancies in supporting workflow applications.
* Involve the executive team in CRM. IBM, as an example, in its prime was famed for the involvement of its CEO not only in sales bids, but also in post-sales situations and crises, such as the failure of a mainframe. This sends out a message to customers - and the entire company - that the buck for customer delight (not satisfaction!) stops on the CEO`s desk. And it`s relatively easy: the CEO and his executive team need to implement a roster in terms of which they assume responsibility for visiting key customers and prospects. As a policy, it is also useful to have high-value customers encounter the same salespeople, account managers and service representatives over a period of time. Customers inherently understand and appreciate the value of building long-term relationships, which in turn create barriers to exit.
It is one of the iniquities of a vendor-driven market - such as CRM - that its attributes and solutions will tend to be associated with technology enablement. But returning to age-old values, practices and actions can take you a long way to fulfilling many of the promises and imperatives of CRM.
(If you`d like to discuss any of these points, or raise your own, feel free to contact me on 083 327 1010 or dougl@knowledgefactory.co.za.)
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